News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • 🇯🇵 Inflation Rate Ex-Food and Energy YoY (SEP) Actual: -0.5% Previous: -0.5% https://www.dailyfx.com/economic-calendar#2021-10-21
  • 🇯🇵 Core Inflation Rate YoY (SEP) Actual: 0.1% Expected: 0.1% Previous: 0% https://www.dailyfx.com/economic-calendar#2021-10-21
  • 🇯🇵 Inflation Rate YoY (SEP) Actual: 0.2% Previous: -0.4% https://www.dailyfx.com/economic-calendar#2021-10-21
  • The S&P 500 and Dow Jones may rise as retail investors shift back to selling the Wall Street major benchmark stock indices. Record highs and resistance levels are fast approaching. Get your market update from @ddubrovskyFX here:https://t.co/5Onr1yXSBz https://t.co/G9ES4vQKwE
  • Heads Up:🇯🇵 Inflation Rate Ex-Food and Energy YoY (SEP) due at 23:30 GMT (15min) Previous: -0.5% https://www.dailyfx.com/economic-calendar#2021-10-21
  • Heads Up:🇯🇵 Core Inflation Rate YoY (SEP) due at 23:30 GMT (15min) Expected: 0.1% Previous: 0.0% https://www.dailyfx.com/economic-calendar#2021-10-21
  • Heads Up:🇯🇵 Inflation Rate YoY (SEP) due at 23:30 GMT (15min) Previous: -0.4% https://www.dailyfx.com/economic-calendar#2021-10-21
  • RT @BrendanFaganFx: S&P 500 Notches Fresh Record Close, Snapchat & Intel Retreat on Earnings Disappointments $SPX $SPY $ES_F $SNAP $INTC $…
  • 🇬🇧 Gfk Consumer Confidence (OCT) Actual: -17 Expected: -16 Previous: -13 https://www.dailyfx.com/economic-calendar#2021-10-21
  • Heads Up:🇬🇧 Gfk Consumer Confidence (OCT) due at 23:01 GMT (15min) Expected: -16 Previous: -13 https://www.dailyfx.com/economic-calendar#2021-10-21
British Pound (GBP) Price Outlook: GBP/USD Ready to Bounce Back

British Pound (GBP) Price Outlook: GBP/USD Ready to Bounce Back

Martin Essex, MSTA, Analyst

GBP price, news and analysis:

  • GBP/USD is bouncing in early trade Tuesday after its losses over the past week that were prompted largely by safe-haven buying of USD on fears that the Chinese property company Evergrande is on the brink of default.
  • The rally in GBP/USD could well continue near-term and, even if it falters and the pair turns down again, there is plenty of support around the 1.36 level.

GBP/USD rallying near-term

GBP/USD is showing signs of recovery after its steep losses over the past week prompted largely by safe-haven buying of the US Dollar on fears that Evergrande, China’s second-biggest property company, is close to going out of business.

It was those fears that prompted the recent “risk-off” mood in the markets that hit stock prices and other assets seen as risky, with volatility up sharply and the situation worsened by concerns that more companies could be targeted by China’s regulators and that a Chinese economic downturn could be prompted.

For now it’s too early to say that the selling is over and that dip buying of stocks in particular will continue but valuations were stretched so it was a retracement that was largely overdue. As for GBP/USD it could easily turn lower again but even if it does there is support around the 1.36 level from the lows touched in mid-July and again in mid-August.

GBP/USD Price Chart, Four-Hour Timeframe (July 15 – September 21, 2021)

Latest GBPUSD price chart.

Source: IG (You can click on it for a larger image)

Bank of England ahead

That said, both the Federal Reserve and the Bank of England have monetary policy meetings this week so no clear trend may emerge ahead of them. Meanwhile, UK economic data released Tuesday showed an even greater fall than expected in public borrowing, which dropped by £20.5 billion in August after dipping by a revised £6.9 billion in July. The latest figure had been expected at £15.6 billion.

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES